Hospital Finances During the First Two Years of the COVID-19 Pandemic: Evidence From Washington State Hospitals.

The COVID-19 pandemic created a broad array of challenges for hospitals. These challenges included restrictions on admissions and procedures, patient surges, rising costs of labor and supplies, and a disparate impact on already disadvantaged populations. Many of these intersecting challenges put pressure on hospitals' finances. There was concern that financial pressure would be particularly acute for hospitals serving vulnerable populations, including safety-net (SN) hospitals and critical access hospitals (CAHs). Using data from hospitals in Washington State, we examined changes in operating margins for SN hospitals, CAHs, and other acute care hospitals in 2020 and 2021. We found that the operating margins for all three categories of hospitals fell from 2019 to 2020, with SNs and CAHs sustaining the largest declines. During 2021, operating margins improved for all three hospital categories but SN operating margins still remained negative. Both changes in revenue and changes in expenses contributed to observed changes in operating margins. Our study is one of the first to describe how the financial effects of COVID-19 differed for SNs, CAHs, and other acute care hospitals over the first two years of the pandemic. Our results highlight the continuing financial vulnerability of SNs and demonstrate how the factors that contribute to profitability can shift over time.

Does Interdisciplinary Care Team Care Management Improve Health Quality and Demonstrate Cost-Effectiveness?

This study evaluated the impact of an interdisciplinary care teams (IDCT) care management program on cost and quality outcomes using a novel algorithm to identify 400 high-risk patients out of 48,235 Medicare Advantage (MA) beneficiaries. Of the 400, 252 were enrolled in the IDCT care management intervention program, while the remaining 148 were not enrolled. A second comparison group consisted of 660 who were referred to the IDCT program but not selected by the algorithm. The program's effectiveness was evaluated 1-year postintervention. Analyses found that health care costs for members enrolled in the IDCT program were reduced by US$1,121.76 and US$1,625.61 per member per month, respectively, relative to those not enrolled and those enrolled by referral. The cost reduction from the program generated a net savings of US$1.9MM, covering the program's cost. Findings suggest IDCTs can cost-effectively manage populations of high-risk patients with better selection and fostering greater interdependence.

Improving risk stratification using AI and social determinants of health.

OBJECTIVES: To determine whether a risk prediction model using artificial intelligence (AI) to combine multiple data sources, including claims data, demographics, social determinants of health (SDOH) data, and admission, discharge, and transfer (ADT) alerts, more accurately identifies high-cost members than traditional models. STUDY DESIGN: The study used data from a Medicaid accountable care organization and included a population of 61,850 members continuously enrolled between May 2018 and April 2019. METHODS: Risk scores generated by 2 models were estimated for each member. One model, developed by Medical Home Network, used AI to analyze SDOH data, ADT activity, and claims and demographic characteristics, whereas the other model (Chronic Illness and Disability Payment System [CDPS]) relied only on demographic and claims information. To compare models, we calculated mean, median, and total spending for members with the highest 5% of AI risk scores and compared these with spending metrics for members with the highest 5% of CDPS scores. We also compared the number of members with the highest 5% of costs prospectively identified by each model as highest risk. We segmented the population by length of prior enrollment to control for varying levels of claims experience. RESULTS: The AI model consistently identified a higher proportion of the highest-spending members. Members deemed highest risk by the AI model also had higher spending than members deemed highest risk by the CDPS model. CONCLUSIONS: Identification of high-cost members can be improved by using AI to combine traditional sources of data (eg, claims and demographic information) with nontraditional sources (eg, SDOH, admission alerts).

Assessing the Performance Value of the Baldrige Journey: A Comparison of Baldrige Applicants and Nonapplicants.

GOAL: The national Baldrige program has supported performance excellence in healthcare since 1999. Previous studies have compared the performance of Baldrige hospital recipients to nonrecipients. This study, however, sought to address the question of whether the mere pursuit of the Baldrige award provides value. METHODS: This study used propensity score matching with linear and quantile regression techniques to understand the impact of hospitals applying the Baldrige Excellence Framework across a comprehensive set of standardized industry performance measures, regardless of award recognition. PRINCIPAL FINDINGS: The analysis demonstrated that Baldrige applicants outperformed non-Baldrige applicants in select operational measures of efficiency (such as inpatient average length of stay), patient experience, and financial measures (including return on net assets, days in accounts receivable, and expenses as a percentage of patient revenues). However, there was no statistically significant difference in clinical performance between Baldrige applicants and nonapplicants. PRACTICAL APPLICATIONS: The findings from this study suggest that hospital leaders can realize significant gains with select operational and financial measures without compromising clinical outcomes when applying the Baldrige Excellence Framework to their organizations.

Environmental and organizational correlates and motivations for provider-sponsored health plan ownership in the post-reform era.

BACKGROUND: The 1980s to 1990s saw many health systems in the United States enter and exit the insurance market in the form of provider-sponsored health plans (PSHPs). Reforms and value-based reimbursement methods have stimulated health care organizations to reconsider PSHP as a logical strategy. PURPOSE: The aim of this study was to examine market and organizational factors associated with PSHP ownership and motivations for engaging in PSHP after health care reforms. The resource dependence theory was used as a theoretical lens. METHODOLOGY/APPROACH: A sequential quantitative to qualitative mixed-methods design was used. The quantitative analysis examined data for 5,849 U.S. hospitals. Results were synthesized with qualitative findings from 10 semistructured interviews representing eight health systems in five states. RESULTS: Organizational and environmental characteristics were significantly associated with PSHP ownership. Hospital and payer concentration, Medicare penetration, income, unemployment rate, government, and for-profit and metro area hospitals were associated with a lower likelihood of PSHP ownership. Salaried physician arrangements, clinically integrated network membership and adoption of other risk-bearing arrangements were associated with higher odds of PSHP ownership. Interviewees described PSHP as the culmination of the journey to value-based care and as a strategy to improve patient care, compete, and diversify revenue streams. CONCLUSIONS: Both market and organizational factors are important considerations for hospitals contemplating PSHP ownership, and motivations for ownership cover a broad range of financial, competitive, strategic, and mission-based goals. PRACTICE IMPLICATIONS: Hospitals considering PSHP ownership must carefully evaluate their competitive landscapes and organizational resources to ensure optimal conditions for this strategy. PSHP ownership has high start-up costs and requires a long-term organizational commitment.

Hospital Performance in the First 6 Years of Medicare's Value-Based Purchasing Program.

The Medicare value-based purchasing (VBP) program, ongoing since 2013, uses financial bonuses and penalties to incentivize hospital quality improvements. Previous research has identified characteristics of penalized hospitals, but has not examined characteristics of hospitals with improvements in VBP program performance or consistent good performance. We identify five different trajectories of program performance (improvement, decline, consistent good or poor performance, mixed). A total of 11% of hospitals were penalized every year of the program, 24% improved their VBP program performance, 14% of hospitals consistently earned a bonus, while 18% performed well in the program's early years but experienced declines in performance. In 2013, organizational and community characteristics were associated with higher odds of improving relative to performing poorly every year. Few variables under managers' control were associated with program improvement, though accountable care organization participation was in some models. We find changes in VBP program metrics may have contributed to improvement in some hospitals' program scores.

Analyzing Workers' Compensation Claims and Payments Made Using Data from a Large Insurance Provider.

BACKGROUND: All states in the USA have established Workers' Compensation (WC) insurance systems/programs. WC systems address key occupational safety and health concerns. This effort uses data from a large insurance provider for the years 2011-2018 to provide estimates for WC payments, stratified by the claim severity, i.e., medical only, and indemnity. METHODS: Besides providing descriptive statistics, we used generalized estimating equations to analyze the association between the key injury characteristics (nature, source, and body part injured) and total WC payments made. We also provide the overall cost burden for the former. RESULTS: Out of the total 151,959 closed claims, 83% were medical only. The mean overall WC payment per claim for the claims that resulted in a payment was $1477 (SD: $7221). Adjusted models showed that mean payments vary by claim severity. For example, among medical only claims, the mean payment was the highest for amputations ($3849; CI: $1396, $10,608), and among disability and death related claims, ruptures cost the most ($14,285; $7772, $26,255). With frequencies taken into account, the overall cost burden was however the highest for strains. CONCLUSIONS: Workplace interventions should prioritize both the costs of claims on average and the frequency.

Enhancing Transitions From Rehabilitation Patient to Wellness Participant for People With Disabilities: An Opportunity for Hospital Community Benefit.

Pressure is increasing on not-for-profit hospitals to demonstrate that they provide sufficient benefit to the community to justify their tax-exempt status. Many industry observers have suggested that this community benefit should address unmet medical needs within the community, deficits in the social determinants of health, or health disparities within communities. We argue that one area of clear unmet need is assistance in helping bridge the transition that people with disabilities (PWD) must make from rehabilitation patient to wellness participant. Programs to bridge this transition are necessary because many PWD struggle to identify strategies to maintain and maximize their own well-being after discharge from the healthcare system. As a result, PWD have worse health outcomes than non-disabled individuals. To address these needs, we propose hospitals take a leading role in establishing new, community-based efforts to provide PWD with benefits that will support their effort to self-manage health. Hospitals are well-suited to lead the creation of these programs because of the important role they play in providing services to PWD and because of their ability to bring together multiple stakeholders required to make supportive programs sustainable.

Hospital ownership of postacute care providers and the cost of care.

BACKGROUND: Hospitals are facing incentives to manage the total cost of care for episodes of illness, including the costs of inpatient care as well as the cost of care provided by physicians and postacute care (PAC) providers. PAC is an especially important component of the overall cost of care. One strategy hospitals employ in managing this cost is to own PAC providers. Prior work on the relationship between PAC ownership and cost has reached mixed conclusions. PURPOSE: The aim of this study was to examine the associations between the episodic costs of care and hospital ownership of PAC providers, including skilled nursing facilities (SNFs), home health agencies (HHAs), and inpatient rehabilitation facilities (IRF). METHODOLOGY: We examine panel data on hospital ownership of PAC providers from the American Hospital Association for 2013-2015 and cost of care data from Centers for Medicare & Medicaid Services' Value-Based Purchasing Program. Using ordinary least squares, we quantify the association between a hospital's PAC ownership choice (both ownership of any PAC provider and ownership of particular types of providers) and the episodic cost of care. RESULTS: In 2015, 80% of hospitals owned some type of PAC provider. We find that ownership of SNFs and HHAs is associated with a lower episodic cost of care, whereas ownership of inpatient rehabilitation facilities is associated with higher episodic costs of care. The effects of ownership do not differ for hospitals that participate in a voluntary shared saving program (Bundled Payment for Care Improvement). CONCLUSION: The effects of PAC ownership vary by the type of PAC provider owned. Our results suggest that ownership of SNFs and HHAs may be a viable strategy for success in reimbursement programs that reward hospitals for managing the total costs for episodes of care.

Risk Factors for Serious Prescription Opioid-Induced Respiratory Depression or Overdose: Comparison of Commercially Insured and Veterans Health Affairs Populations.

Objective: To characterize the risk factors associated with overdose or serious opioid-induced respiratory depression (OIRD) among medical users of prescription opioids in a commercially insured population (CIP) and to compare risk factor profiles between the CIP and Veterans Health Administration (VHA) population. Subjects and Methods: Analysis of data from 18,365,497 patients in the IMS PharMetrics Plus health plan claims database (CIP) who were dispensed a prescription opioid in 2009 to 2013. Baseline factors associated with an event of serious OIRD among 7,234 cases and 28,932 controls were identified using multivariable logistic regression. The CIP risk factor profile was compared with that from a corresponding logistic regression among 817 VHA cases and 8,170 controls in 2010 to 2012. Results: The strongest associations with serious OIRD in CIP were diagnosed substance use disorder (odds ratio [OR] = 10.20, 95% confidence interval [CI] = 9.06-11.40) and depression (OR = 3.12, 95% CI = 2.84-3.42). Other strongly associated factors included other mental health disorders; impaired liver, renal, vascular, and pulmonary function; prescribed fentanyl, methadone, and morphine; higher daily opioid doses; and concurrent psychoactive medications. These risk factors, except depression, vascular disease, and specific opioids, largely aligned with VHA despite CIP being substantially younger, including more females and less chronic disease, and having greater prescribing prevalence of higher daily opioid doses, specific opioids, and most selected nonopioids. Conclusions: Risk factor profiles for serious OIRD among US medical users of prescription opioids with private or public health insurance were largely concordant despite substantial differences between the populations in demographics, clinical conditions, health care delivery systems, and clinical practices.

Capital Investment by Independent and System-Affiliated Hospitals.

Capital expenditures are a critical part of hospitals' efforts to maintain quality of patient care and financial stability. Over the past 20 years, finding capital to fund these expenditures has become increasingly challenging for hospitals, particularly independent hospitals. Independent hospitals struggling to find ways to fund necessary capital investment are often advised that their best strategy is to join a multi-hospital system. There is scant empirical evidence to support the idea that system membership improves independent hospitals' ability to make capital expenditures. Using data from the American Hospital Association and Medicare Cost Reports, we use difference-in-difference methods to examine changes in capital expenditures for independent hospitals that joined multi-hospital systems between 1997 and 2008. We find that in the first 5 years after acquisition, capital expenditures increase by an average of almost $16,000 per bed annually, as compared with non-acquired hospitals. In later years, the difference in capital expenditure is smaller and not statistically significant. Our results do not suggest that increases in capital expenditures vary by asset age or the size of the acquiring system.

Costs of providing antiplatelet medication for percutaneous coronary intervention patients.

OBJECTIVES: To propose a model in which insurers work with hospitals to provide a discharge supply of antiplatelet medication to patients receiving stents and to examine the cost implications of this strategy. STUDY DESIGN: A decision tree was modeled using data from previously published research. The study adopts an insurer's perspective. METHODS: Data on patient delays in filling antiplatelet prescriptions and rates of associated adverse events were taken from published research. The costs of adverse events (death or acute myocardial infarction [AMI]) are taken from Healthcare Cost and Utilization Project estimates of hospital costs for diagnosis-related groups associated with AMI. RESULTS: In the base case, expected costs totaled $1782 when stent implantation patients were provided with a discharge supply of medication and $1857 under the current standard of care, a difference of $75. Insurers can supply up to 60 days of medication without increasing total costs. The strategy of offering a discharge supply of medication is cost saving under a range of estimated rehospitalization costs and medication costs. However, this result is dependent on the ability of a discharge supply of medication to reduce rates of death or AMI. CONCLUSIONS: Providing discharge supplies of antiplatelet medication resulted in lower overall costs for insurers in most of the cases modeled.